Is now the time to put Surgical Science Sweden (STO:SUS) on your watch list?
The thrill of investing in a company that can turn its fortunes around is a big draw for some speculators, so even companies with no revenue, no profit and no bottom line can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the basis of sound business fundamentals. A loss-making company has yet to turn a profit, and eventually the inflow of external capital may dry up.
So if this idea of high risk and high reward doesn’t suit you, you might be more interested in profitable, growing companies, like Surgical Science Sweden (STO: SUS). Now, that’s not to say that the company offers the best investment opportunity out there, but profitability is a key component of business success.
Check out opportunities and risks within the SE Medical Equipment industry.
How fast is Surgical Science Sweden growing its earnings per share?
Investors and mutual funds chase profits, and that means stock prices tend to rise with positive earnings per share (EPS). So, for many budding investors, improvement in EPS is considered a good sign. It is an outstanding achievement for Surgical Science Sweden to have increased EPS from SEK 0.78 to SEK 2.72 in just one year. While it is difficult to sustain growth at that level, it bodes well for the company’s future prospects. This may point to the business hitting an inflection point.
Top-line growth is a good indicator that growth is sustainable, and when combined with a high margin before interest and tax (EBIT), it’s a great way for a company to maintain a competitive edge in the market. On the revenue front, Surgical Science Sweden has performed well over the past year, growing revenue by 259% to SEK 750 million, but the EBIT margin numbers were less impressive, with a decline over the past 12 months. So it appears that the future may bring further growth, especially if EBIT margins can remain stable.
You can take a look at the company’s revenue and profit growth trend, in the chart below. To see the actual numbers, click on the chart.
In investing, as in life, the future is more important than the past. So why not check this out free interactive visualization of Swedish Surgical Science forecast profits?
Are Surgical Science Sweden insiders in line with all shareholders?
It should give investors a sense of security to own shares in a company if insiders also own shares, creating a close alignment of their interests. So it’s good to see that Surgical Science Sweden insiders have a significant amount of capital invested in the stock. In fact, they have a considerable fortune invested in it, currently valued at SEK 2.8 billion. This amounts to 34% of the shares in the company. Sufficient to guide management’s decision-making process along a path that provides the greatest possible benefit to shareholders. Here is an opportunity to invest in a company whose management has tangible incentives to deliver.
Should you add Surgical Science Sweden to your watchlist?
Surgical Science Sweden’s results have taken off quite impressively. That kind of growth is nothing short of eye-popping, and the large investment held by insiders should really brighten the outlook for the company. Sometimes rapid EPS growth is a sign that the business has reached a turning point, so there’s a potential opportunity to be had here. So based on this quick analysis, we think it’s worth considering Surgical Science Sweden for a spot on your watch list. Another important measure of business quality not discussed here is return on equity (ROE). Click on this link to see how Surgical Science Sweden shapes up to industry colleagues when it comes to ROE.
There is always the opportunity to make good purchases of shares such as is not growing incomes and do not has insiders buying shares. But for those considering these important metrics, we encourage you to check out companies like do have those features. You can access a free list of them here.
Note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Valuation is complex, but we help make it simple.
Find out about Surgical Science Sweden is potentially over- or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and caveats, dividends, insider trading and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only by using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by fundamental data. Note that our analysis may not take into account recent price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.